Govt earmarks income bar for LIG

Nov 15, 2012, 06.09AM ISTTNN[ Mahendra Kumar Singh ]

NEW DELHI: Families living in cities and towns with annual income of up to Rs 1 lakh or monthly earning of up to Rs 8,334 will fall in the category of economically weaker section (EWS), according to new criteria formulated by the housing and urban poverty alleviation ministry.

Households having income between Rs 1 lakh and Rs 2 lakh or monthly earning of up to Rs 16,667 will be classified as low income group (LIG).

The ministry, however, did not revise the income criteria for middle income group (MIG) and high-income group (HIG) segment, arguing that these segments did not fall under its purview.

The decision to raise the bar on annual income needed to qualify for benefits under housing schemes such as Rajiv Awas Yojana and credit risk guarantee fund for EWS and LIG is expected to benefit 20 lakh people over the next five years.

The ministry plans to provide credit risk guarantee to lending institutions against housing loans up to Rs 5 lakh for new borrowers in the EWS/LIG categories through Rs 1,000 crore credit risk guarantee fund.

"The decision will ensure availability of bank loans for more poor people living in pathetic conditions in cities under credit guarantee fund scheme," housing and urban poverty alleviation minister Ajay Maken told TOI.

"Also, these people will be able to take benefits under Rajiv Awas Yojana and EWS housing schemes," he added.

Maken has been arguing that lower income criteria forces people to bribe officials to get false income certificates. The worrying fact before the government is that out of total housing shortage of 18.78 million units, the majority of it is in the EWS (56%) and LIG (39.4%) segments.

The ministry is going to convey the decision to banks, financial institutions and state governments, urging them to implement it with immediate effect.

At present, the income criteria for selection of beneficiaries under various schemes of the ministry is a monthly household income of up to Rs 5,000 or annual income of Rs 60,000 for EWS and Rs 5,001 to Rs 10,000 or up to 1.2 lakh for LIG segments.